Delaware taking part in school exchange (5-2)
I believe the answer is:
trade-in
'exchange' is the definition.
(trading in is a kind of exchanging)
'delaware taking part in school' is the wordplay.
'delaware' becomes 'DE' (standard two letter abbrev).
'taking part in' indicates putting letters inside.
'school' becomes 'train' (school can mean to train or coach).
'de' placed into 'train' is 'TRADE-IN'.
(Other definitions for trade-in that I've seen before include "Part-exchanged item" , "Old item given in part payment for a new one" , "Article used in part-exchange" , "Older article used in part payment to retailer" , "Something used in part exchange" .)