"Как бы не" is a traditional construct that is often utilized to convey negative meaning.
Let's look into the details of your example.
"Правительство боится, как бы этот закон не привел к увлечению бюджетных мест." - "The government is afraid that this law can lead to the increase of subsidized enrollment(?)"
Now let's see if we can drop the "не":
"Правительство боится, как бы этот закон привел к увлечению бюджетных мест." - this phrase is clumsy and its meaning is unclear. Why? Because the word "боится" implies negative meaning - but the particle "не" is missing, so we are not sure what exactly the government is afraid of.
What if we change the negative verb into a neutral one?
"Правительство думает, как бы этот закон не привел к увлечению бюджетных мест." - "The government is thinking that this law can lead to the undesired increase of subsidized enrollment". This new phrase is pretty close in meaning to the original one.
"Правительство думает, как бы этот закон привел к увлечению бюджетных мест." - "The government is thinking how to make this law to increase the subsidized enrollment".
You see, now dropping the "не" completely changed the meaning!
And more examples:
"Как бы так" - "That's the way it is"
"Как бы не так" - "No way!"