Chandler was raised by his father and relatives, and by age 8, he virtually supported himself financially from his paper route and doing odd jobs in his community. In 1917, he graduated from Corydon High School, where he had been captain of the baseball and football teams. His father wanted him to study for the ministry, but Chandler instead entered Transylvania College (now Transylvania University) in Lexington, Kentucky. It was there that he received his lifelong nickname "Happy" because of his jovial nature. He paid for his education by doing chores for the local citizens. Chandler was captain of Transylvania's basketball and baseball teams and the quarterback of the football team. He was a teammate of Dutch Meyer, a future member of the College Football Hall of Fame. He also joined the Pi Kappa Alpha fraternity and the Omicron Delta Kappa honor society. In 1918, during World War I, the United States Army started a Student Officers' Training Corps at Transylvania, and Chandler began training to be an officer. The war ended before he was called to active duty.