Ok, I fixed it but I'm not sure which step did it.
Open the sound manager and go to recording devices, make sure microphone is set to both default device and default communication device.
Next, right click on microphone and select properties. Make sure that under the levels tab, microphone is set to 100 and boost to 0.
Then under enhancements tab, enable noise suppression and acoustic echo cancelation.
Hope this helps anyone down the road who runs into the same issue.