The U.S. Education Department (ED) and other agencies continued to operate with only a skeleton staff through the December holidays after the second federal shutdown in as many months took effect Dec. 16.

ED ran out of money on that date after the expiration of the government's latest short-term spending bill. Congress and the White House were unable to agree to an extension because it is tied to larger fiscal issues, including a debate on how to balance the federal budget within seven years.

The shutdown could leave some students out in the cold, particularly those who need -- but have not yet received -- aid for the spring 1996 semester.

If the impasse continues, the effects on education "are going to be very serious," said Leo Kornfeld, a senior advisor to ED Secretary Richard Riley.

ED is processing loan applications, but they can not verify information on an applicant's social security number, citizen status and past loan record because of shutdowns elsewhere in government, he said. The shutdown affects about 20,000 students per day.

This shutdown is different from the last one, which lasted only a few days, Kornfeld said. "If it just lasts a day or two, we can catch up," he said. But a longer shutdown not only jeopardizes aid to more students but also prevents ED from finishing a new financial aid form for students who want to apply for aid for fall 1996, he added.

ED also suspended its efforts to collect on defaulted loans because of the shutdown, Kornfeld said.

Nonetheless, many ED programs are not in direct jeopardy because they are forward funded, which means their budgets do not conform to the government's fiscal year. The government's new fiscal year begins in October, whereas forward-funded programs do not need their new allocations until the following July.

The shutdown began because Republicans and President Clinton could not agree on a seven-year balanced budget plan. GOP proposals include deeper cuts in Medicare, welfare and education than President Clinton wants.