The university was founded in Reykjavík in 1918 as a secondary school called the Cooperative College (Samvinnuskólinn). The school was run by the Icelandic cooperative movement (Samband íslenskra samvinnufélaga) and was originally intended as a training college for the staff of cooperative stores and other members of the movement. The founder and first head of the school was Jónas Jónsson from Hrifla, who was for many years a member of Parliament for the Progressive Party. He had studied at Askov Folk High School in Denmark and Ruskin College in Oxford, and his ideas about education were innovative for the time.