This paper presents a feasibility study into the design of a low-cost adaptive hearing aid. This study is presented in the form of a software simulation and a hardware proof of concept. The designed hearing aid is able to apply compensatory amplification based on an audiogram, and has a user steerable direction of focus. The features in the software and hardware solutions were tested and the results were critically analysed by determining error. The simulation applies compensatory amplification to the full frequency range of speech (250 Hz to 8 kHz) with an average error of 1.41%, and has 19 steerable directions. The hardware solution was limited to two frequency bands, 2.8-3.5 kHz and 5.6-7 kHz. Compensatory amplification can be applied with an error of 9.85%. There is an average error of 32.88% in directional hearing within five directions and 42.7% error in omnidirectional hearing. While calculated error was significant, the hardware implementation verified the concepts demonstrated in software and hence the investigation was successful. The overall cost of the device was $100. For future work, an integrated circuit chip should be created for the preprocessing of the audio signals.