Stanley Pringle hit one of two foul shots to put Penn State up 67-64 with 15 seconds left in overtime, and Indiana's D.J. White secured the rebound. Armon Bassett missed an open 3 from the wing, and Pringle lunged out of bounds to try to save the ball but ended up throwing it to Gordon.
The Indiana freshman, known for his 3-point shooting ability, missed a 3 to tie with about 3 seconds left. Talor Battle added a free throw with 0.5 seconds remaining to send the Hoosiers to their second straight road loss.
Fans rushed the court after Penn State (15-15, 7-11 Big Ten) won its fifth straight home game and secured seventh place in the Big Ten. Indiana (25-6, 14-4) missed an opportunity to clinch the second seed in the upcoming conference tournament, settling for third in the conference after Purdue beat Michigan 72-58 later Sunday.
Jackson had 13 points and 10 rebounds, while Battle added 10 points. Gordon had 19 points after halftime. White finished with 20 points and 12 rebounds.
Jackson had muscled his way through the paint to convert an offensive rebound to put Penn State ahead for good, 63-61 with 1:51 left in overtime
Kyle Taber hit one of two from the foul line to put Indiana ahead 58-55 with 1:42 left before Jackson's 3-point play with 22.9 seconds left tied the game, completing the Nittany Lions' rally from an eight-point deficit.
With a tense crowd on its feet, Indiana interim coach Dan Dakich then put the ball in Gordon's hands to try to win in regulation, but his jumper in the lane rattled off the rim and Jackson secured the rebound as the buzzer sounded.
The Nittany Lions also upset then-No. 8 Michigan State at home on Feb. 2.
Gordon nearly single-handedly got the Hoosiers back in the game after Indiana went the first 5:29 of the second half without a field goal to trail 36-30. A 3-point play and three 3-pointers by Gordon during a 14-0 run put Indiana ahead 46-38 with 11 minutes left in regulation.
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With Miami Heat coach Pat Riley watching from the stands, Gordon finished 8-of-24 from the field, including 4-of-16 from 3-point range. The Hoosiers hit just 38 percent from the field, including 7-of-33 (21 percent) from 3-point range.
Penn State's less-heralded first-year players kept the Nittany Lions in the game. Freshman Jeff Brooks converted an offensive rebound to start an 8-0 run that was finished by fellow freshman Andrew Jones' own putback to tie the game at 46 with less than 9 minutes left.
Indiana had won 5 of its previous 6, though the one loss in that stretch was a disastrous 103-74 rout to Michigan State on March 2, the Hoosiers' most lopsided defeat in four years.
This one hurt for the Hoosiers just as much.
Both teams were missing key players. Dakich said forward Jamarcus Ellis didn't make the trip to Happy Valley for disciplinary reasons.
Penn State announced before he game Sunday that forward Jamelle Cornley would miss the rest of the season and undergo arthroscopic surgery on his left knee Monday.
[Associated Press; By GENARO C. ARMAS]
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