Raised in a strict fashion by his father, Schaeder studied classical philology at the University of Kiel since 1914.

Completing "all his academic degrees in an incredibly short time", Schaeder gained his Ph.D. at Kiel in 1919 with a thesis on the Islamic theologian Hasan al-Basri.

In the 1920s, German Iranian studies was dominated by Friedrich Carl Andreas and Christian Bartholomae, but Schaeder belonged to neither of those schools.

He "acquired an amazing knowledge" of Semitic, Iranian and Turkic languages, and of philosophy, religious science and general linguistics.

Upon the death of Markwart in 1930, Schaeder was appointed Chair of Iranian and Armenian Philology at the University of Berlin.