The capabilities of a distance education system to enhance instructional programs of small schools by providing equity and increasing quality of educational opportunity, providing access to subject matter and subject matter experts, and providing interaction and joint activities with students in other schools are of sufficient merit to formulate and adopt educational policies which will give positive direction as small schools move forward. The educational policy options from among which educational decision makers may choose include preserving the small school as a conscious educational choice, capitalizing on delivery systems, preparing teachers to use distance education, allocating instructional resources, assigning responsibilities for material/media selection, simplifying logistics, and nurturing partnerships. Although most policies must be determined by local school boards, state educational units play a crucial role in influencing these policies by the way they meet responsibilities in determining state patterns of fiscal support, employment of statewide curriculum standards, regulations governing teacher certification/recertification, accreditation policies, provision of technical assistance to local districts, and ability to be a persuasive leadership force in articulating state educational goals. Thus the productive use of distance education will require not only sound and informed policy choices at each level independently but also joint and cooperative policy determinations. (NEC)