My university is requiring that we use dual authorization in email server connections.

You should ask the university IT folks how to set up 2-step authentication for your account. Typically it works by creating an application specific password for your account to be used for Thunderbird. There shouldn't be any changes required on the Thunderbird end. I'd expect there's no difference when setting this up for Outlook.

OAuth2 authentication is not related to 2-step authentication. Thunderbird supports OAuth2 authentication for Gmail, AOL, and Yahoo IMAP accounts, as well as for SMTP.

Thanks for you speedy reply! I've attached part of the instructions sent by IT. The problem I've having is the screens for Thunderbird 60.4.0 are different from the screen shots IT supplied (I'm not a technical person) and I can't find in Thunderbird 60 how to do step 7. thanks

the screens for Thunderbird 60.4.0 are different from the screen shots IT

The screens for Thunderbird 60.4.0 are pretty much the same as the screen shots from IT.

I'm not sure what exactly your problem is. Are you having difficulties to set up the account in Thunderbird in the first place? And how is this related to 2-step authentication?