A study was conducted at Northwestern Michigan College (NMC), in Traverse City, to evaluate the variables affecting the feasibility of distance education to meet the educational needs of the college's geographically isolated community. Data sources included a literature review and student, faculty/staff, and community opinion surveys conducted by the state department of education and local chamber of commerce from 1991 to 1993. In addition, NMC piloted several two-way interactive classes between the main campus and the Cadillac campus, conducted a survey of these students, and gathered college and state cost data on distance education. Study findings included the following: (1) a lower percentage of residents in the five-county area serviced by NMC had four-year degrees than in the state as a whole, and per capita income was $3,680 lower than the state; (2) area residents indicated a desire for NMC to becomes a university or for the college to expand opportunities for advanced degree courses; (3) among students enrolled at NMC in winter 1991, 46% listed university transfer as their primary goal; (4) the Traverse Bay Economic Development Corporation identified the lack of baccalaureate programs as an impediment to business growth; (5) sufficient funding sources were found to support distance education efforts; and (6) students enrolled in pilot distance courses indicated they would take additional courses and recommend them to others. Tables of equipment required and costs for two-way interactive audio and video, and 60 references are appended. (KP)