How are you getting files to your computer, through a cable, card reader, or putting the card directly into the computer? If going through the card, can you see the RAW files on the card when looking at them through a directory explorer?
How are you opening the files in Elements, directly in Elements? Are they raw files when you see them in the directory? And does it open Adobe Camera Raw, within Elements?
When you look at your photo in explorer, do you see *.cr2 extension or *.jpg? Just thinking, but RAW file once processed you'll have to save it as JPG or TIFF or other image format but it is no longer RAW.
Depending on whether or not you've actually set your camera up correctly to shoot in RAW I don't know of any program that would import the RAW CR2's and then convert them to jpg's PLUS delete the original CR2.Either you are importing incorrectly, not shooting in RAW to begin with or the files are on your computer but you aren't finding them. Do a hard drive search for the files by searching for *.cr2
I have every version of PSE except 11 and 12 (some differences may apply from 10 up) but this is one thing that must happen. If you have a RAW file, it must go through ACR. If you are not seeing this than you are not importing RAW files. The most current version of ACR is 8.2. But it may not be compatible with older versions of PSE. Especially back beyond 11 or 12.
So something else is a foul.
Do you see ACR when you open your photos? Which Rebel do you have? Older versions may not support your camera.