Figure university is in bad condition (6)
I believe the answer is:
statue
'figure' is the definition.
(statue is a kind of figure)
'university is in bad condition' is the wordplay.
'university' becomes 'u'.
'is in' means one lot of letters goes inside another.
'bad condition' becomes 'state' (to be 'in a state' is to be in a bad condition).
'u' placed into 'state' is 'STATUE'.
(Other definitions for statue that I've seen before include "Large figure" , "Sculptured likeness" , "Solid representation of the human form" , "Carved representation" , "Astute (anag.)" .)