Extraordinary student I observed in class (6)
I believe the answer is:
genius
'extraordinary student' is the definition.
(a very clever person)
'i observed in class' is the wordplay.
'observed in' indicates putting letters inside.
'class' becomes 'genus' (I've seen this before).
'i' going into 'genus' is 'GENIUS'.
(Other definitions for genius that I've seen before include "faculty" , "Exceptional talent" , "One has an extraordinary talent" , "Exceptionally creative person" , "outstanding person" .)