Layden was born in Davenport, Iowa, where he attended Davenport High School (now Davenport Central High School.) At Notre Dame, he played fullback alongside quarterback Harry Stuhldreher, left halfback Jim Crowley, and right halfback Don Miller; the four collectively earned the nickname of "The Four Horsemen of Notre Dame" from legendary sportswriter Grantland Rice, and are still considered one of the best backfields in college football history. Named an All-American during his senior year, Layden culminated his collegiate career in the 1925 Rose Bowl against Stanford, returning two interceptions for touchdowns in Notre Dame's 27-10 victory. The Four Horsemen were reunited for a professional football game in 1925 by the Waterbury Blues as they played the Cleveland Bulldogs. The game though