Preheat the oven to 350 degrees F. In a mixing bowl, toss the apple slices with the 1/4 cup granulated sugar and cinnamon until evenly coated. Spread the apples in an 8-inch square baking dish.

In a separate bowl, combine the oats, flour, and brown sugar. Add the softened butter and mix with a fork or your fingers until the mixture forms coarse crumbs. Sprinkle the oat topping evenly over the apples.

Bake for 35 to 40 minutes until the apples are soft and the topping is golden brown.

While the crisp bakes, prepare the sauce. In a small saucepan, whisk together the milk, 2 tablespoons granulated sugar, and cornstarch. Cook over medium heat, stirring often, until the mixture thickens and begins to bubble. Remove from heat and stir in the vanilla extract. Let the sauce cool slightly before serving.