- Preheat oven to 325 degrees.
- Bring water to boil in medium pot. Add oil and macaroni. Cook for 5-8 minutes, or until macaroni swells and softens. Drain.
- Meanwhile, melt butter in saucepan set over medium-low heat. When melted, stir in flour. Cook for 3 to 4 minutes, stirring, until roux is browned. Slowly add milk, whisking vigorously. Next, add 2 cups American cheese and stir until melted. Whisk in Parmesan, black pepper, and mustard. Taste, and add salt as needed.
- Add macaroni to small casserole dish. Stir in cheese sauce. Scatter remaining ½ cup American cheese on top. Lightly sprinkle with paprika and bake for 30 minutes, or until cheese bubbles around edges.