Stegeman was born and raised in Holland, Michigan, and was of Dutch descent. He attended the University of Chicago, where he starred in many sports, including track and field and football under the direction of the legendary Amos Alonzo Stagg. Stegeman played on the school's 1913 National Championship football squad, and was hailed by his coach, Stagg, as one of the finest athletes he had ever had the privilege of coaching. After playing football for another season in 1914, Stegeman graduated from Chicago with a Bachelor of Philosophy (Ph.B.) in 1915.