Positive greeting meets Virginia in school (7)
I believe the answer is:
yeshiva
'school' is the definition.
(I have seen 'Jewish school' mean 'yeshiva' so perhaps 'school' could also mean 'yeshiva')
'positive greeting meets virginia' is the wordplay.
'positive' becomes 'yes'.
'greeting' becomes 'hi' (hi is a kind of greeting).
'meets' is a charade indicator (letters next to each other).
'virginia' becomes 'va' (US state abbreviation).
'yes'+'hi'+'va'='YESHIVA'
'in' acts as a link.
(Other definitions for yeshiva that I've seen before include "Jewish school" , "Talmud study" , "Seminary for training rabbis" , "Orthodox Jewish college" , "Orthodox Jewish seminary - is heavy (anag)" .)