Resuming on the second day of play needing a further 45 runs to claim first innings points, Old Students rallied together and reached the target with seven wickets down.
It was a galvanising performance from Old Students, with experienced performers Gino Saracino (25 runs), Tim Looby (18) and Luke McPhillamy (18) hanging tough with the pressure on.
A superb five-wicket haul from Nagambie's Brayden Biggs (5-48) was the only highlight for the Lakers as they suffered their third loss from their past four games.
Saturday's round 12 outcome at Congupna Recreation Reserve now means Students will need an outright victory in its final match to claim a finals berth.
And their encouraging effort against the sixth-placed Lakers will no doubt stoke the flames of hope for this weekend.
Once Students passed the away side's first innings total, they went on to post 135 runs off 49.2 overs, leaving Nagambie to begin its second innings dig.
An early wicket to star player Liam Callegari (1-43) — who finished with match figures of 8-74 — had Nagambie lose James Auld for a duck, as the visitors repeated their mistakes from the opening day.
Luke Nolan departed for seven and soon the Lakers were 2-11 and staring at a possible outright loss.
However, a stunning unbeaten 61-run knock from opener Ricky Misiti lifted the Lakers off the canvas and into a position where an outright loss was evaporated for Old Students.
It was Misiti's first half-century and highest score of the season, as the opener ended a string of low totals.
Looking ahead to this weekend, Nagambie takes on second-placed heavyweight Kyabram away from home.
Meanwhile, Old Students will begin their task of claiming an outright win and finals berth when they travel to take on the in-form Northerners.
THE GAME
Nagambie 99 (Luke Nolan 41, Liam Callegari 7-31) & 3-81 (Ricky Misiti 61 not out) lt
Old Students 135 (Brendan Crouch 28, Gino Saracino 25, Tim Looby 18, Luke McPhillamy 18, Brayden Biggs 5-48, Mark Nolan 3-53)
STAR PLAYER
Liam Callegari (Old Students): Callegari's incredible first innings figures of 7-31 proved to be the match-winning performance for the Students. The quick ended with match figures of 8-74 and with plenty of memories from a standout game.