Principals in overambitious universities thus dismissed (3)
I believe the answer is:
out
'dismissed' is the definition.
(dismissed in cricket)
'principals in overambitious universities thus' is the wordplay.
'principals in' says to take the initial letters.
The first letters of 'overambitious universities thus' is 'OUT'.
(Other definitions for out that I've seen before include "Not within" , "At fault - dismissed" , "In error" , "Defeated" , "Mistaken; unconscious" .)