NEW YORK - President Barack Obama's top economic adviser said on Sunday that the United States is a long way from the point where merit trumps background in higher education, adding that scholarship assistance is crucial to leveling the playing field.

Lawrence Summers, director of Obama's National Economic Council said that less than 10 percent of students in leading colleges and universities come from families in the lower half of the income distribution.

For this reason, increases in assistance for scholarships are one of the most important parts of President Obama's budget, Summers told a Yeshiva University event in New York.

The attendance, the gaps in attendance and graduation rates between children of poor, middle class and rich families, have risen over the last generation, Summers said.

We will not be the kind of country we can be until there is equal opportunity in American higher education, he said..

(Reporting by Kristina Cooke; Editing by Diane Craft)