The Icelandic parliament, the Althingi, is legally and politically responsible for the school system. There are four school levels in Iceland: Pre-primary;  compulsory schools - typically a single setting structure for primary and lower secondary education;  upper secondary and higher education. The parliament determines the basic objectives and administrative framework of the educational system. All education, apart from the higher educational level, falls under the jurisdiction of the Ministry of Education and Children.

Municipalities are responsible for the operation of pre-primary and compulsory schools, whereas the operation of upper secondary schools and higher education institutions is the responsibility of the State.

Continuing and adult education is provided by public authorities, private institutions, companies and organisations. The Ministry of Education and Children monitors the implementation of all educational laws and regulations, apart for higher education. This falls under the responsibility of the Ministry of Higher Education, Science and Innovation. 

Education in Iceland has traditionally been organized within the public sector, and there are relatively few private institutions in the school system. Almost all private schools receive public funding.