The school was founded in 1900 as the Rasmussen School of Business by Walter Rasmussen in Saint Paul, Minnesota. Rasmussen believed that the require for skilled professionals by the local company community was not being met. This belief led to the development of the school’s vision, which was:
To prepare young men and ladies for responsible positions in all lines of company.
To assist pupils win their way to a noble manhood or womanhood.
The first classes were held in September 1900. With the advent of women's suffrage in 1920 through the passage of the Nineteenth Amendment, the school’s female enrollment numbers began to increase. In 1945 Walter Rasmussen retired and sold his interest in the school to Walter Nemitz. Nemitz instituted a number of curriculum modifications, requiring that students discover how to use calculating machines, adding machines, and duplicating machines. Additionally, he mandated that the schools' facilities be updated, which included installing fluorescent lighting in all buildings and buying 100 typewriters for students to use.
By 1950, the school had graduated over 22,400 students. In 1961, Wilbur Nemitz and Robert Nemitz, both sons of Walter Nemitz, took ownership of the school. In 1974, Rasmussen College acquired the St. Cloud Business College, and in 1979 it acquired the Northern Technical School of Business. In 1983, the school opened a campus in Mankato, MN. The opening of this campus would mark a shift from acquiring schools as a means of expansion, to growth through internal expansion. Extra campuses were subsequently opened in Eagan, MN (1989), St. Cloud, MN (1997), Rockford, IL (2006), Lake Elmo, MN, Eden Prairie, MN and Green Bay, WI (all 2007), and Wausau, Wisconsin (2010). The school also opened an on-line campus in 2002. Additionally, the school acquired Aakers College in North Dakota and Webster College in Florida and begin to merge the schools into Rasmussen's operations. Presently, the school has over 100,000 graduates. The North Dakota campus graduated its first four-year degree students in December 2007.
In the summer of 2010, Rasmussen College and other for-profit colleges came under scrutiny because they "might not provide adequate training for specific jobs, and high tuition expenses might put students into debt for years."