HARRISBURG — The federal government is asking Pennsylvania's student-loan agency to repay as much as $15 million that officials say it overcharged for loan subsidies.

The U.S. Department of Education outlined its request in a letter to the Pennsylvania Higher Education Assistance Agency on Friday, two months after the department's inspector general released an audit of the PHEAA subsidies.

The audit determined that PHEAA was overpaid $35 million in federal subsidies between July 2003 and June 2006 — 13 percent of the more than $263 million it received during that period. But the department ultimately did not accept all the audit's findings, Patricia Trubia of the Federal Student Aid office wrote in her letter to PHEAA.

Federal regulations allow lenders to receive federal subsidies for student loans funded by tax-exempt bonds issued before Oct. 1, 1993. The department estimates that PHEAA overbilled the government $15 million between October 2004 and September 2006 for loans that were refinanced with taxable and ineligible tax-exempt bonds, Trubia wrote.

FPITTSBURGH — A former funeral director rejected a plea bargain and opted for a nonjury trial on charges that he abused corpses of newborn babies by storing them in his garage.Robert Winston Jr., 63, of McKeesport, had a contract with Magee-Womens Hospital to dispose of stillborns, fetuses and other remains of unborn babies. Prosecutors contend he failed to do so in hundreds of cases.Under the proposed plea deal, Winston was to plead no contest to eight corpse-abuse charges and prosecutors would have dropped several others. He also was to plead no contest to a charge of theft by deception.By refusing to accept the plea deal, Winston also will be tried on all counts.

ALLENTOWN — Authorities said Friday that three girls appear in sexually explicit cell phone images that were forwarded to many students at a suburban high school, one more than originally reported.Prosecutors said that two girls appearing in the images have been identified as Parkland High School students. Contrary to an initial report, they said another girl seen having sex with a boy in a video had not been identified, and they are unsure what school she attends. The boy also remains unidentified.The two Parkland students shown exposing themselves are 14 and 17, said Matthew S. Falk, Lehigh County's chief deputy district attorney.Both girls took the pictures of themselves."They transferred the photographs to someone else at school," Falk said. "What I don't think they anticipated was the widespread dissemination of those pictures."County prosecutors contacted about 40 students and their parents, asking that the students come forward to show that the images had been deleted from their cell phones. They gave them until Tuesday to meet with a trooper at the high school. About 15 students turned over their phones for inspection on Thursday.

PITTSBURGH — The Pittsburgh Public Schools and its teachers have approved a new three-year labor agreement for teachers and other professionals.The school board approved the deal at a special session Friday, shortly after the teachers' union announced its members had ratified the contract.The new deal gives annual raises of $2,100 to teachers and other professionals who are at the top of their salary scales.Under the new contract, the school day will be increased by 10 minutes starting in 2008-09. Also, current employees will not have to pay more for health care coverage.The new contract covers teachers, social workers, counselors and other professionals. It is retroactive to July 1, when the previous two-year deal expired.