I recently had an issue where a domain-joined machine with Windows 7 was unable to have new users log in.

Anyone who had an existing account on the machine could still log in, but new users couldn’t and were getting the error message “User Profile Service failed the logon. User profile cannot be loaded.”

Nearly all the Google searching I did on the issue returned results that were to do with existing users being unable to log in, and generally for non domain-joined machines.

Luckily I found one Technet Thread that pointed me in the right direction.

The fix was to go into the C:\Users folder, tell Explorer to show hidden files, get the Properties on the Default folder, go to Advanced Security Settings and tick the the checkbox to “Replace all child object permission with inheritable permissions from this object”. Apply these permissions and then try logging in again.