EAST LANSING, Mich. -- Penn State continues to be a second-tier program in the Big Ten Conference.

After squandering a 17-point, third-quarter lead and losing to Michigan State, 35-31, Saturday, the Nittany Lions finished 4-4 in the conference and tied for fifth place with Iowa.

Only once in the past decade has Penn State finished higher than fourth in the Big Ten standings, and that was in 2005, when it was 7-1 and earned a share of the championship.

Since the 2000 season, the Lions are just 32-32 in conference play. That includes a 5-16 record against Big Ten heavyweights Ohio State, Michigan and Wisconsin, and a 27-16 mark against the conference's seven other teams.

"We got all the talent in the world," center A.Q. Shipley said. "We just got to put it together and finish."

Penn State built a 24-7 advantage against Michigan State in the third quarter on Kevin Kelly's 5-yard touchdown run off a fake field goal. But the Lions couldn't protect the lead.

The defense, missing starting tackle Chris Baker and backup linebacker Navorro Bowman, who did not make the trip due to legal problems, was gouged for 288 yards and 28 points the rest of the way.

"It's not the way you want to go out," middle linebacker Dan Connor said. "Toward the end, they crushed us."

Even on the one occasion where Penn State managed to stop Michigan State quarterback Brian Hoyer, it couldn't halt a fake punt by the Spartans from their 25-yard line.

Jehuu Caulcrick took a direct snap from center on the fourth-down play and ripped off a 17-yard gain. Eight plays later, he scored the winning touchdown on a 1-yard run with 4:08 remaining.

"We came here with a lot to prove on the road and we just let it slip away from us," receiver Deon Butler said.

Penn State marched to Michigan State's 24 with 1:50 to play. But quarterback Anthony Morelli -- who was not made available to the media after the game -- threw four consecutive incompletions to end the threat.

"There were 15 plays in a game like this that could make a difference," Paterno said. "It's hard to pick out one and tell you it was this or that."

Paterno shrugged off the suggestion that his program is regressing.

"That's ridiculous," he said. "I told you Michigan State was a good football team."

Paterno plans to give his players the upcoming week off for Thanksgiving. When they regroup Sunday night, the Lions hope to have a better idea of their bowl destination and opponent.

Penn State and Michigan, which both finished 8-4 after starting the season with much higher hopes, are competing for spots in the Dec. 28 Champs Sports Bowl in Orlando, Fla., and the Dec. 29 Alamo Bowl in San Antonio.

It will mark the Lions' 34th bowl game appearance under Joe Paterno, who will be coaching his 500th game at the school.

"We know we're better than 8-4, but we've got to prove it," Butler said.

Shipley said the players have no one to blame but themselves for their embarrassing collapse against Michigan State.

"If we had come away with a win and then had won the bowl game, we were looking at 10-3, and it's a real good season," he said. "But now we have to win the bowl to finish 9-4.

"It's disappointing. We had a whole year more of experience this season. We should have been able to do more."

Butler said the Lions have some work to do in order to join the Big Ten's elite teams.

"After the bowl game, we got to regroup," he said. "We're definitely going to work harder than anybody in the offseason, and us guys who are going to be seniors, we're going to be a force next year.

"We're going to put Penn State back on top."