Mosquera-Perea was scoreless in two minutes of action in Tuesday's 69-58 loss to No. 14 Wisconsin.
"Hanner is going to be paying a price in the office of the courts and with the Dean's office," Hoosiers coach Tom Crean said in a statement released by the school. "He also is going to continue to be disciplined inside of our program with no end in sight to that.
"Hanner has done everything and more than what has been expected of him since the incident and we are allowing him to be available for competition beginning tonight."
Mosquera-Perea, who had appeared in all 24 games for Indiana prior to the arrest, is averaging 2.8 points and 2.2 rebounds this season.