The $25 fee is collected to help authorized passport acceptance facilities cover the costs of administering passport services to the American public, on behalf of the Department of State.
The Passport Application Acceptance Program consists of approximately 9,000 locations that make applying for a new passport much more convenient than it otherwise would be, and the $25 fee is what funds the program.
All new adult passports, child passports, and replacements for lost, stolen or damaged passports who are required to apply in person will be subject to the fee.
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