Typical American university: all on vacation! (5)
I believe the answer is:
usual
'typical' is the definition.
(I've seen this in another clue)
'american university all on vacation' is the wordplay.
'american' becomes 'US' (United States).
'university' becomes 'U' (abbreviation for university).
'on vacation' suggests removing the centre (after the inside letters have vacated the word).
'all' with its middle taken out is 'al'.
'us'+'u'+'al'='USUAL'
(Other definitions for usual that I've seen before include "Common or garden" , "Customary, routine" , "Typically occurring" , "Typically done" , "Normal, customary" .)