Shaughnessy was born on March 6, 1892 in St. Cloud, Minnesota, the second son of Lucy Ann (Foster) and Edward Shaughnessy. He attended North St. Paul High School, and prior to college, had no athletic experience. When he attended the University of Minnesota, however, he played college football under head coach Henry L. Williams and alongside halfback Bernie Bierman. Shaughnessy considered Williams to be football's greatest teacher, and Williams considered him to be the best passer from the Midwest. Shaughnessy handled both the passing and kicking duties for the team.