US school dance about to occur involving student in difficulty (7)
I believe the answer is:
problem
'difficulty' is the definition.
(problem is a kind of difficulty)
'us school dance about to occur involving student' is the wordplay.
'us school dance' becomes 'prom' (I've seen this before).
'about' means one lot of letters goes inside another.
'to occur' becomes 'be' ('be' can be a synonym of 'occur').
'involving' is an insertion indicator.
'student' becomes 'L' (as in L-plates for learner drivers).
'be' going around 'l' is 'ble'.
'prom' enclosing 'ble' is 'PROBLEM'.
'in' acts as a link.
(Other definitions for problem that I've seen before include "Matter to be solved" , "Matter hard to cope with" , "Difficulty to be solved" , "Brainteaser" , "Question or source of perplexity" .)