Told fibs about American university being restrictive (7)
I believe the answer is:
limited
'restrictive' is the definition.
(thesaurus)
'told fibs about american university' is the wordplay.
'told fibs' becomes 'lied' (I've seen this before).
'about' is an insertion indicator.
'american university' becomes 'mit' (I've seen this in other clues).
'lied' going around 'mit' is 'LIMITED'.
'being' acts as a link.
(Other definitions for limited that I've seen before include "Finite - type of company" , "Restricted in extent" , "Of small range" , "Restricted, finite" , "Constrained" .)