There are two main sources of funding for the University of Iceland: one is state funding, and the other is lottery income.

In 2004, the state allocated approximately US$83.15 million.

Proceeds from the lottery are earmarked for school building construction.

In addition, research funding for each institute comes from different sources: state appropriations, National Science Foundation, university science funds, funding from companies and international organizations.

In 2005, the total funding of the Institute of Natural Sciences was US$7.5 million (US$70,000 per capita), of which state funding was 414.4 million ISK (equivalent to US$6.6 million).

The University of Iceland does not charge tuition fees except for certain subjects (dentistry, business administration, etc.). You only need to pay a registration fee of US$500 per semester, but you must pay for the rest of the expenses (textbooks, food and accommodation, etc.) by yourself without any assistance.

The government can provide low-interest loans to help students study based on their academic performance.

With the exception of foreign language majors, all subjects are taught in Icelandic.

Foreign students who want to study at the University of Iceland to obtain any degree must first learn Icelandic for more than two years and pass the exam before they can enter regular professional studies (short-term students do not need to learn Icelandic).

Foreigners must fill out the admission application form and send it (mail it) to the International Department of the University of Iceland before the end of February each year. The admission notice will be issued in early June and the semester will start in early September.

Currently, most majors at the University of Iceland offer master's and doctoral degree programs.

Some disciplines, such as natural sciences and industrial engineering, require you to complete some courses abroad before you can be awarded a doctorate.

At present, except for some majors in the Department of Art and the Department of Geology, which can award doctoral degrees, other disciplines only award bachelor's and master's degrees or equivalent degrees. However, the university encourages disciplines with mature conditions to set up doctoral programs.