Later, he attended the University of Pennsylvania (Penn) and graduated in 1926 as the senior class Salutatorian. At Penn, he was initiated into Theta Delta Chi, and he also served as president of the Phi Deuteron Charge. Upon his graduation from the University of Pennsylvania School of Engineering and Applied Science his father gave him a cabin cruiser that slept eight. He was also Junior and Senior class president. O'Malley originally enrolled at Columbia University in New York City for law school, but after his family lost their money in the Wall Street Crash of 1929, he switched from Columbia Law School to night school at Fordham University. Edwin O'Malley's dry goods business was failing and Walter had to help run the business.